What happens with the recordings after the auction is over? Will the new Government intervene to change the terms of the auction or even to postpone it?
Mobile telephony operators have sent hundreds of pages of observations, suggestions, criticism and comments to telecom regulator ANCOM about the conditions of the auction that will decide what the local communications market will look like until 2029, according to market information and to information sent to ZF by companies planning to take part in the auction.
Romania is putting up for sale in mid this year – in the largest auction of its kind in history – mobile communications licenses for 2014-2029, during which time revenues could amount to at least EUR40 billion.
Apart from proposals to modify fees and the period during which the process is set to be completed, operators also told ANCOM they were concerned over the non-stop audio and video recording of the auction and over what would happen with the recordings afterwards.
“One reason for concern has to do with the auction organization. The whole auctioning process seems to be organized in a rush, which there was no need for, and this was not a good thing. We are talking about an auction with an impact over many years from now, 2014-2029, so the importance of the process is obviously huge,” a person involved in advising with the ANCOM auction documentation commented for ZF.
“The question that now emerges regarding the auction is: does it need to be done as fast as possible or as transparently as possible?,” says another manager involved in the auction from the side of the operators.
“Another issue is the imbalance between the obligations of the participants and those of the organizers. While everything will be audio and video-recorded in the rooms where company representatives are, the same strictness does not apply for the members of the commission,” say representatives of operators taking part in the auction. They say the web interface would be essential to minimize risks surrounding this auction.
Such an application would allow one to monitor the stage of the auction at any point and would allow bidding in real time.
“The recording and all the other measures proposed by the market regulator are aimed at compensating for the lack of the web interface and the security it brings,” say the same officials.
In answer to ZF questions on the subject, the representatives of Orange Romania – the largest mobile telephony operator on the market – said they have suggested the use of a web interface to ANCOM.
But the list of complaints sent by the operators is longer. RCS&RDS told the market regulator that the prices asked were too high and that the state should go back on its demand for the license price to be paid upfront instead of in installments, as has been the case so far.
Orange and Vodafone, told ANCOM that the current method of selling temporary licenses (for 2013-2014) can have as an effect the suspension of services for some of the clients and could lead to costs of between EUR100 and EUR200 million in lost revenues for the state budget.
The question of the moment – will the new Government intervene in the auction?
All calculations and scenarios made by mobile telephony operators on the mobile telephony auction could be upset by an element that wasn’t on anybody’s agenda a few weeks ago: the fall of the government led by Mihai Razvan Ungureanu.
In theory, the entire auctioning process is managed by ANCOM – an independent authority, but in practice anything can happen: the auction could be postponed or the conditions of participation could be modified.
One recent case in point is that of the auction for digital television licenses – a process that was suspended by the Government led by Emil Boc, although the auction was nearing its final stage and several international companies had submitted their bids.
It remains to be seen whether the Government change will also bring a change to ANCOM’s management team, by modifying the law that regulates the functioning of the institution. The track record of the institution suggests this is possible: so far no single president of the institution has ended their term at the legal deadline, with all heads of the telecom regulator so far being changed when the interest of ruling parties demanded it.
(English version by Daniela Stoican)